+
Infra Spending Formula
ECONOMY & POLICY

Infra Spending Formula

The Government has received a drubbing by former governors on its plans to raise overseas debt by issue of sovereign bonds. Yet, it still needs to kickstart infrastructure spending. As stated earlier in this column, here are various ways of achieving the same goal, shares Pratap Padode, Editor-in-Chief, CW.

Save Rs 1.85 trillion by not buying land
Don’t buy land for infrastructure projects. Instead, provide a stake to the owner with a minimum rental guarantee (that takes care of ongoing sustainability) and an alternate marginal land parcel (for occupation). According to recent estimates, the capex for land alone for road projects is Rs 1.85 trillion.

Save money allocated for PMAY (affordable housing)
Use government land for BOT affordable housing projects where builders collect rent to offset their investment, akin to a toll offsetting the capex on a road project. (There has been a proposal of this kind of PPP, as announced by the Minister of Housing & Urban Affairs 18 months ago. Even the new rental act can fast forward this.)

But the Government also needs to raise animal spirits in the economy. So what could be the kick-starter for demand? So far, the Government and experts have not suggested a single demand-creating scheme. Here is one that is sure to jumpstart demand:

Raise GST exemption limit to Rs 10 million from Rs 4 million
Raise the minimum levels for GST for taxes but keep compliance mandatory within an easier time framework. This will soothe the informal economy, which is gasping for oxygen.

Release Rs 3.75 trillion from the dispute table
Amnesty scheme for erstwhile VAT and service tax debottlenecking to receive top priority with a Joint Secretary-level person responsible for running the campaign and target.

Raise the levels of income-tax returns exempted from scrutiny

Fast-forward PSU divestment
The PSUs will, in turn, begin using their funds and resources more efficiently and dynamically. PSUs will invest in capex and encourage the private sector to follow suit.

Clear stalled projects with a deadline
Auction the projects stuck for want of funds with clear title transfers and immunity to buyers from past deeds. (So far, JSW Group is treading cautiously in the Bhushan Power case as it has not been clearly provided immunity.)

But where to invest the funds?
First
, incomplete projects must receive full attention where investments have taken place but returns are stuck owing to red tape. Change the contractor, transfer the administrator, and use the power of the law where small patches of yet-to-be acquired land are stalling completion. (Take, for instance, incomplete dam projects in Maharashtra where farmer suicides are still a flaming issue.)

Then, improve sentiments
No appeals should be filed by government departments against judgements awarded by official arbitrators. This defeats justice and clogs up the legal system.

Accountability of officers issuing refund of taxes needs to be stepped up. (Exporters are a harried lot, among others.)

Water and waste management projects seek the lowest capex and yet are the least among all infrastructure projects, even within the smart cities mission. They require a special thrust and deserve tax incentives.

City municipalities must relax entertainment taxes on restaurants and hotels that can spur job growth as well; increased spending will boost revenues and bring smiles to cities.

If the campaign to penalise black money was carried out nationally with such aplomb, why not a campaign to incentivise honest tax payers and honest business houses? Why not offer a bonus to honesty? Currently, it appears that the honest taxpayer is always burdened with loads of compliances and subject to harassment. Introduce a loyalty point credit system for those who comply. Let those points accumulate to gain certain advantages that offer prestige and esteem. Let them be treated with a level of dignity by government organisations and bureaucracy just as first-class passengers are treated by an airline. It is time to bring back the class system where the divider will be honesty, not wealth.

The Government has received a drubbing by former governors on its plans to raise overseas debt by issue of sovereign bonds. Yet, it still needs to kickstart infrastructure spending. As stated earlier in this column, here are various ways of achieving the same goal, shares Pratap Padode, Editor-in-Chief, CW. Save Rs 1.85 trillion by not buying land Don’t buy land for infrastructure projects. Instead, provide a stake to the owner with a minimum rental guarantee (that takes care of ongoing sustainability) and an alternate marginal land parcel (for occupation). According to recent estimates, the capex for land alone for road projects is Rs 1.85 trillion. Save money allocated for PMAY (affordable housing) Use government land for BOT affordable housing projects where builders collect rent to offset their investment, akin to a toll offsetting the capex on a road project. (There has been a proposal of this kind of PPP, as announced by the Minister of Housing & Urban Affairs 18 months ago. Even the new rental act can fast forward this.) But the Government also needs to raise animal spirits in the economy. So what could be the kick-starter for demand? So far, the Government and experts have not suggested a single demand-creating scheme. Here is one that is sure to jumpstart demand: Raise GST exemption limit to Rs 10 million from Rs 4 million Raise the minimum levels for GST for taxes but keep compliance mandatory within an easier time framework. This will soothe the informal economy, which is gasping for oxygen. Release Rs 3.75 trillion from the dispute table Amnesty scheme for erstwhile VAT and service tax debottlenecking to receive top priority with a Joint Secretary-level person responsible for running the campaign and target. Raise the levels of income-tax returns exempted from scrutiny Fast-forward PSU divestment The PSUs will, in turn, begin using their funds and resources more efficiently and dynamically. PSUs will invest in capex and encourage the private sector to follow suit. Clear stalled projects with a deadline Auction the projects stuck for want of funds with clear title transfers and immunity to buyers from past deeds. (So far, JSW Group is treading cautiously in the Bhushan Power case as it has not been clearly provided immunity.) But where to invest the funds? First, incomplete projects must receive full attention where investments have taken place but returns are stuck owing to red tape. Change the contractor, transfer the administrator, and use the power of the law where small patches of yet-to-be acquired land are stalling completion. (Take, for instance, incomplete dam projects in Maharashtra where farmer suicides are still a flaming issue.) Then, improve sentiments No appeals should be filed by government departments against judgements awarded by official arbitrators. This defeats justice and clogs up the legal system. Accountability of officers issuing refund of taxes needs to be stepped up. (Exporters are a harried lot, among others.) Water and waste management projects seek the lowest capex and yet are the least among all infrastructure projects, even within the smart cities mission. They require a special thrust and deserve tax incentives. City municipalities must relax entertainment taxes on restaurants and hotels that can spur job growth as well; increased spending will boost revenues and bring smiles to cities. If the campaign to penalise black money was carried out nationally with such aplomb, why not a campaign to incentivise honest tax payers and honest business houses? Why not offer a bonus to honesty? Currently, it appears that the honest taxpayer is always burdened with loads of compliances and subject to harassment. Introduce a loyalty point credit system for those who comply. Let those points accumulate to gain certain advantages that offer prestige and esteem. Let them be treated with a level of dignity by government organisations and bureaucracy just as first-class passengers are treated by an airline. It is time to bring back the class system where the divider will be honesty, not wealth.

Next Story
Infrastructure Urban

India to Invest Rs 600 Billion to Upgrade 1,000 ITIs

As part of its drive to modernise vocational training, the Ministry of Skill Development and Entrepreneurship (MSDE), in collaboration with Gujarat’s Labour and Employment Department, held a State-Level Workshop at the NAMTECH Campus within IIT-Gandhinagar to discuss the National Scheme for ITI Upgradation.The consultation brought together key stakeholders from industry and the training ecosystem to align expectations and support implementation of the scheme, which aims to transform 1,000 Industrial Training Institutes (ITIs) across India using a hub-and-spoke model. The total outlay stands ..

Next Story
Infrastructure Urban

India Unveils Rs 600 Billion Maritime Finance Push

The Ministry of Ports, Shipping & Waterways (MoPSW) hosted the Maritime Financing Summit 2025 in New Delhi, bringing together over 250 stakeholders including policymakers, industry leaders, global investors, and financial institutions. The summit, held under the ambit of Maritime Amrit Kaal Vision (MAKV) 2047, focused on transforming India into a leading maritime power with strengthened financial, infrastructural, and technological capabilities.Union Minister Sarbananda Sonowal emphasised India's strategic progress, noting that average port turnaround times have dropped from four days to u..

Next Story
Infrastructure Urban

Govt Allocates Rs 500 Million To Boost Community Radio

The Central Government, through its ‘Supporting Community Radio Movement in India’ scheme, has allocated Rs 500 million to strengthen the community radio ecosystem across the country. The initiative aims to assist both newly established and long-operational Community Radio Stations (CRSs), ensuring their relevance to local educational, social, cultural, and developmental needs.According to the policy published by the Ministry of Information and Broadcasting, CRSs may be set up by not-for-profit organisations with at least three years of demonstrated community service. These stations are ex..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?